This week, the AUD/USD pair is declining, trading around 0.6650.
Pressure on the position of the Australian currency is exerted by the publication of the minutes of the last December meeting of the Reserve Bank of Australia (RBA), according to which officials raised the interest rate by 25.0 basis points to 3.10% but at the same time considered the possibility of its adjustment due to the uncertainty of inflation prospects and labor market. Investors are wondering if the regulator will continue a moderate increase in the indicator by 25.0 basis points at the next meeting in February 2023 or leave it at the same level to assess the effect of the measures already taken. Most experts believe that next year the interest rate will peak at 3.70% but not before August, so a pause in the increase cycle is possible, which puts pressure on the Australian dollar.
The American currency is receiving support after the last meeting of the US Federal Reserve last week when officials said that the fight against high inflation, despite the latest positive data, is not over yet, and the tightening of monetary policy should be continued. Moreover, the interest rate may remain high throughout the next year and begin to decline only in 2024. Today, investors are waiting for the publication of November data from the housing market: according to forecasts, the number of building permits will decrease from 1.512M to 1.485M, and the rate of new home construction – from 1.425M to 1.400M, which may slow down the strengthening of the US currency.
The trading instrument is close to 0.6591 (Murrey level [6/8], the lower line of Bollinger bands), the breakdown of which will give the prospect of further decline to 0.6469 (Murrey level [5/8]), 0.6347 (Murrey level [4/8]). The key “bullish” level is 0.6740 (the middle line of Bollinger bands, the Murrey level [7/8], and Fibonacci retracement 38.2%). If it consolidates above it, the quotes can return to 0.6885 (Fibonacci retracement 50.0%) and 0.6958 (Murrey level [+1/8]).
Technical indicators do not give a single signal: Bollinger bands are horizontal, the MACD histogram is decreasing in the positive zone, but Stochastic is getting ready to leave the oversold zone.
Resistance levels: 0.6740, 0.6885, 0.6958. | Support levels: 0.6591, 0.6469, 0.6347.